(A report from the Standing Committee.)
Contents
- Introduction
- Background
- Parochial Cost Recoveries for 2001
- Ministry and property costs for 2001
- Cost Recoveries for 2001
- Application of the Parish Assistance Fund
- Recommendation
- Annexure A
- Annexure B
1. This report is made to the Synod under clause 2(2) of the Parochial Cost Recoveries Ordinance 1999 (the "1999 Ordinance") which requires that the Standing Committee report to the 2nd session of the 45th Synod about -
(a) a description of the ministry and property costs payable in 2001 and an estimate of those costs; and
(b) the cost recoveries charge payable by each parochial unit in 2001 and details of how that charge is calculated.
Recovery of Ministry and Parish Costs
2. In 1998, the Synod amended the Assessment and Charges Ordinance 1975 to provide (in clause 10) for the recovery of "ministry and property costs" from parochial units by way of an annual cost recoveries charge. For this purpose, "ministry and property costs" are the costs, expenses, charges or contributions which, in the opinion of the Standing Committee, have been incurred, or will be incurred, on behalf of or in relation to a parochial unit or any members of the clergy licensed to a parochial unit.
3. Clause 10(2) of the Assessment and Charges Ordinance 1975 provides that the following are examples of "ministry and property costs" -
(a) the costs of effecting insurances under the Church Insurances Ordinance 1980 for parochial units and any officers or employees of parochial units;
(b) superannuation contributions for members of the clergy licensed to parochial units;
(c) costs and expenses of, or incidental to, the maintenance of stipend continuance insurance for members of the clergy licensed to parochial units;
(d) contributions to the fund established by the Sydney Diocesan Sickness and Accident Fund Ordinance 1969; and
(e) contributions for long service leave for members of the clergy licensed to parochial units.
Formula for calculating cost recoveries charges
4. In 1999, the Synod agreed the formula by which ministry and property costs would be recovered from parochial units in each of 2000, 2001 and 2002. The agreed formula is set out in the Schedule to the Parochial Cost Recoveries Ordinance 1999. The amount determined by that formula to be payable by each parochial unit as its contribution to total ministry and property costs is known as a "cost recoveries charge".
5. The agreed formula provides that the cost recoveries charge payable by each parochial unit in a particular year is the total of the following charges for that year -
(a) the "Fixed Charge" - This charge is the sum of the costs referred to in items 3(b), (c), (d) and (e) above for a minister and reflects the principle adopted by the Synod in 1999 that all parochial units should pay the "on-costs" costs associated with a rector or curate-in-charge. In 2000, the Fixed Charge was $7,164.
(b) the "Assistant Minister Charge" - This charge is payable by a parochial unit for each assistant minister licensed during the year to the parochial unit and is the sum of the costs referred to in 3(b), (c), (d) and (e) above for that assistant minister. This charge reflects the principle adopted by the Synod in 1999 that all parochial units should pay the "on-costs" for each assistant minister licensed to the parochial unit. In 2000, the Assistant Minister Charge for a senior assistant minister (being an assistant minister with 7 or more years of service) was $7,164. For other assistant ministers the charge was $6,567.
(c) the "Variable Charge" - This is the contribution of the parochial unit to other ministry and property costs (not being the costs recovered as part of the Fixed Charge or the Assistant Minister Charge) and is expressed as a percentage of the net receipts of the parochial unit, as determined under the Assessment and Charges Ordinance 1975. In 2000, the ministry and property costs which were funded by the Variable Charge included the insurances referred to in 3(a) above, the costs of funding the administration of the sexual misconduct protocol and the costs of funding the Parish Assistance Fund. In 2000, the Variable Charge was 3.19% of the net receipts of a parochial unit.
6. Under the agreed formula, if the Fixed Charge for a person acting as the minister of a parochial unit is paid by another parochial unit or body, the cost recoveries charge payable by the parochial unit may be reduced by an amount equal to the Assistant Minister Charge for 1 assistant minister.
Parish Assistance Fund
7. A consequence of the adoption by the Synod of the formula referred to in item 5 above is that the financial concession to provisional parishes in years prior to 2000 (being a 50% reduction in the minimum cost recoveries charge) is no longer available. The Synod considered that this form of financial concession was invisible and undesirable, and too broad a policy to serve a strategic purpose.
8. The Synod has established a Parish Assistance Fund for the development of parish ministry. Each year, as part of the Variable Charge, each parochial unit will make a contribution to the Fund. The total amount of those contributions will then be distributed among parochial units by the regional councils for the purpose of assisting parochial units.
9. As a transitional measure, in 2000 and 2001, the Parish Assistance Fund is to be used to provide a rebate to parochial units which are required to pay a cost recoveries charge of an amount which is greater than the charge that would have been payable had the cost recoveries charge been calculated using the formula by which cost recoveries charges were calculated in 1999.
Parochial Costs Recoveries for 2001
10. Having agreed in 1999 the formula to calculate the cost recoveries charges payable in 2000, 2001 and 2002, an ordinance is not required to be promoted to the Synod in 2000 to adopt those charges for 2001. Rather, the Standing Committee has authority to apply the formula agreed in 1999 and calculate the cost recoveries charge payable by each parochial unit in 2001.
Ministry and property costs for 2001
11. Attached as Annexure A is a description of the ministry and property costs totalling $4.319 million which the Standing Committee considers are payable in 2001, and an estimate of the amount of each of those costs. There are no additional categories of ministry and property costs proposed in 2001 than in 2000.
Superannuation/stipend continuance/sickness and accident/long service leave
12. It is expected that the total amount of these costs will increase by about $78,000 compared to the grants approved for these purposes in 2000. This reflects, in large part, the expected increase in stipends in 2001. These charges are largely a function of stipend levels.
Insurances
13. The cost of the insurance program is expected to rise by $110,000 in 2001. Currently, the insurance market is very tight and large increases in premiums were experienced in 2000. The Property Trust's insurance brokers have advised that market conditions will remain poor for the next few years and that premiums are expected to increase in 2001 by about 22%.
Professional standards unit
14. To date, the professional standards unit has been responsible for administering the sexual misconduct protocol. The director of that unit has worked on a part time basis with only one half day a week secretarial assistance. A full time director with secretarial assistance has now been appointed. This reflects the amount of work which is required to be undertaken by the unit including the administration of the new State child protection guidelines. The cost of the unit is expected to increase by $65,000 in 2001.
GST assistance
15. Assistance is being provided to ensure that parishes register and fulfill their obligations under the New Tax System legislation. The cost of this assistance is expected to be $40,000 in 2001, which is the same as the cost of the assistance provided in 2000.
Funding of the Parish Assistance Fund
16. The amount required to fund the Parish Assistance Fund in 2001 is estimated to be about $326,000. This is the total of the amounts to be paid to affected parochial units to compensate them for the increase in the cost recoveries charge above the charge which would have been payable had it been calculated according to the formula applied for 1999.
17. The formula agreed by the Synod in 1999 for the calculation of cost recoveries in 2000, 2001 and 2002 has been applied by the Standing Committee to estimate cost recoveries payable by each parochial unit in 2001. Annexure B sets out the estimate for each parochial unit. Those estimates are exclusive of any GST which may be payable.
Fixed Charge and Assistant Minister Charge
18. For 2001, the Fixed Charge for each parochial unit is estimated to be $7,464. The Assistant Minister Charge is estimated to be $7,464 for a senior assistant minister and $6,841 for each other assistant minister. The following table details how those charges have been calculated -
| Fixed Charge $ |
Assistant Minister Charge |
||
| SeniorAssistantMinister $ |
Other Assistant Minister $ |
||
| Superannuation | 6,231 | 6,231 | 5,608 |
| Stipend Continuance Plan | 311 | 311 | 311 |
| Sickness/Accident Fund | 82 | 82 | 82 |
| Long Service Leave | 840 | 840 | 840 |
| Total Charge | 7,464 | 7,464 | 6,841 |
| Increase over 2000 | 4.2% | 4.2% | 4.2% |
Variable charge
19. As indicated in item 5(c) above, the Variable Charge is calculated as a percentage of the net receipts of a parochial unit. For 2001, the Variable Charge payable by each parochial unit is estimated to be 3.30% of the parochial unit's net receipts for 1999. In calculating the rate of the Variable Charge for 2001, the following is relevant -
(a) The ministry and property costs to be recovered by way of the Variable Charge are the costs associated with the insurances referred to in item 3(a) (as to which see (b) following), the costs of the professional standards unit, the costs of the GST assistance and the amount required to fund the Parish Assistance Fund.
(b) While the total cost of the insurance program in 2001 is expected to be $1.045 million, the amount which will be recovered from parochial units on account of such cost is only $845,000. As in 2000 the difference, being part of the insurance costs for heritage buildings (that is, insurance for buildings above a threshold value of $4.1 million), will be paid by a grant from the Synod under the Synod Appropriations and Allocations Ordinance 2000.
Application of the Parish Assistance Fund
20. Annexure B contains a column headed "Parish Assistance Fund" which sets out the estimate of the amount due to each affected parochial unit from the Parish Assistance Fund. The amount due has been calculated on the basis of the principles referred to in item 9.
21. Standing Committee recommends that the Synod receive this report.
For and on behalf of the Standing Committee
RODNEY DREDGE
Deputy Chief Executive Officer
Sydney Diocesan Secretariat
1 August 2000
Annexure A
Click here for Annexure A.
Annexure B
Click here for Annexure B.